Greek economy shrinks official 7.3pc in second quarter

ATHENS: The Greek economy shrank 7.3 percent in the second quarter on a 12-month comparison, the statistics authority said on Thursday, signalling a greater fall than expected.

The institute had estimated the contraction at 6.9 percent.

The body also revised the shrinkage in the first quarter up to 8.1 percent, while the government has warned the economy could shrink by about 5.0 percent this year instead of the previously estimated 3.5 percent.

The revision was necessary because the relevant statistics for the second quarter were available only about two months after the end of June, the authority said.

It added that consumption fell by 6.8 percent compared to the second quarter of 2010 while investment fell by 17.9 percent.

Under the same comparison, exports overall fell by 1.4 percent, though the export of goods actually rose by 2.2 percent.

Greece has argued that the greater-than-forecast recession has complicated its efforts to meet public deficit reduction targets agreed with the EU and the IMF in return for a 110-billion-euro ($155-billion) bailout loan secured last year.

But Athens' creditors insist that the application of the economic recovery programme is a condition for the release of fresh loans under a new 159-billion-euro package pieced together in July, which is still awaiting approval by the parliaments of eurozone members.

Copyright AFP (Agence France-Presse), 2011